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4H Box Breakout

  • #201
  • May 18, 2009 11:27pm May 18, 2009 11:27pm
Quoting Ace284
Once price has broken I use basic fibonacci study on a daily chart. But even to do that requires practice. I usually dont trail i just move the stops from level 2x to 2.5x to 3x and so on. It gets tricky and when i have a slight doubt i pull out. If you notice i took 4x the profit on one of the trades by it actually went 12x. I use my discretion after the 2x level.

** be careful though it gets very tricky and in NO CIRCUMSTANCE SHOULD ANYONE TAKE PROFIT BELOW THE 1X LINE. Even below 2X is not good.
This may be helpful to people a daily auto fib drawing indicator
Attached File(s)
File Type: ex4 AutoDayFibs.ex4   8 KB | 1,334 downloads
  • #202
  • May 19, 2009 6:01am May 19, 2009 6:01am
2005-2006 is very bad for this strategy on history on gbp/jpy may be shoud change something?
  • #203
  • May 19, 2009 6:54am May 19, 2009 6:54am
Hi all...

I dont understand why people think a method of trading is going to work for all years since trading began.....markets change ,,economics around the world change...wars start and end.....

If you find a system that is working currently, trade it.....if it stops working make changes or find another.....while still running the old one on demo to see if it begins to work again...if you have a range of trading methods in your tool box...I think you will find one that works under whatever current conditions exits....

But many systems are trashed because they dont work over time..even though they are making good money at the time.......just ride the current conditions
  • #204
  • May 19, 2009 9:01am May 19, 2009 9:01am
Quoting Angler
Hi all...

I dont understand why people think a method of trading is going to work for all years since trading began.....markets change ,,economics around the world change...wars start and end.....

If you find a system that is working currently, trade it.....if it stops working make changes or find another.....while still running the old one on demo to see if it begins to work again...if you have a range of trading methods in your tool box...I think you will find one that works under whatever current conditions exits....

But many systems are...
How i can catch the moment when system die ? for example i can have few profit month and one month will have big losses which destroy my profits and it will look like i spend months to get 0 or loss?
  • #205
  • May 19, 2009 9:44am May 19, 2009 9:44am
If you have consecutive 3 or 4 losses then you should rethink about lot size and waiting or skipping few weeks of trading.

Once you know the boat is sinking get out as early as possible if you can not fix the leak


  • #206
  • May 19, 2009 10:39am May 19, 2009 10:39am
Quoting anto
If you have consecutive 3 or 4 losses then you should rethink about lot size and waiting or skipping few weeks of trading.

Once you know the boat is sinking get out as early as possible if you can not fix the leak


if i do that and skip trading that strategy after 3-4 losses it may began good trade but i will missing it . Because i did not know when stratagy began work or began no work!
  • #207
  • May 19, 2009 12:56pm May 19, 2009 12:56pm
I just wanted to say do not keep on loosing until you blow your account.

You can reduce the lot size.....and figure out what is going wrong....
  • #208
  • May 19, 2009 1:14pm May 19, 2009 1:14pm
Quoting anto
I just wanted to say do not keep on loosing until you blow your account.

You can reduce the lot size.....and figure out what is going wrong....
The trick there would that you must have 3-4 working strategies. Like i am now going with 4 hour macd, this one and there another one that's my own.
  • #209
  • May 19, 2009 1:32pm May 19, 2009 1:32pm
Quoting nasir.khan
The trick there would that you must have 3-4 working strategies. Like i am now going with 4 hour macd, this one and there another one that's my own.
how do you know that your 4 hour macd will be work now? if will not work now what will you do? And how i can change 4box breakout strategy if it not working? I must wait for 1 month with losses or wait only few loss trades. And how to come back to 4box stratagy how to know that it will be work well now?
  • #210
  • May 19, 2009 1:46pm May 19, 2009 1:46pm
Quoting dkv023
how do you know that your 4 hour macd will be work now? if will not work now what will you do? And how i can change 4box breakout strategy if it not working? I must wait for 1 month with losses or wait only few loss trades. And how to come back to 4box stratagy how to know that it will be work well now?
This is one reason why I use so many different trading systems. Markets can change, but no one change can completely wipe out my trading. When it comes to determining whether or not a trading system works anymore, you first need to figure out what edge the system has. For example,

 

  1. BigDog Strategy: Breakout of the hours before and after the New York open.
  2. 4H Box: Direction of the week can be determined by the first 4H bar.
  3. Most Commercial EAs: Euro-Pairs move in a predictable range during the asian session, so when the price reaches the upper range, go short, and go long when the price reaches the lower range.
  4. AshFx: Trend Reversals and continuation using Bill Williams theories.
  5. TKimble Daily Scalping: Most of a day's movement happens in one large and defined burst. Any whipsawing will destroy that system.
  6. Scalping Systems in General: Look for a very specific pattern in the market to take advantage of



Basically, you need to find the pros and cons for every system you trade. Once you have those pros and cons, you then figure out whether or not the current market is using that. If you have trouble remembering or analyzing this on the fly, write up a fact sheet for the system you are analyzing. State the edge the system has, what advantage the system has on the market, what kind of market the system works in, and what kind of market kills the system.

  • #211
  • May 19, 2009 1:48pm May 19, 2009 1:48pm
Looking for a Holy Grail...

i think you need to listen Mark douglas' interview, i will post the link late here.
In my opinion, I just place trades with some hope of luck and do this in a consistent way. This consistent way comes from following a system.

All the indicaotrs some how represent (follows) the price movement in a smoothed way.

Now it is up to you guys....time to trade..
  • #212
  • May 19, 2009 2:24pm May 19, 2009 2:24pm
thanks Ronald and Anto i thing that is holy gral to can to change strategy then it begining to do many losses but how do this practicaly i dont know, because in one moment market can to fake me, and i will foul which strategy work well in that moment
  • #213
  • May 19, 2009 3:31pm May 19, 2009 3:31pm
Hi Ace284

Thanks for the tip it looks like a good common sense strategy for a newby like myself to implement.

However could I ask is this a strategy that can only be implemented at the start of the week and how do you draw that box?

Like I said am a newby and am soaking up anything and everything like a sponge in the forum.

Kind regards and many thanks.

Aidy Mac
  • #214
  • Edited 3:44pm May 19, 2009 3:33pm | Edited 3:44pm
Quoting dkv023
thanks Ronald and Anto i thing that is holy gral to can to change strategy then it begining to do many losses but how do this practicaly i dont know, because in one moment market can to fake me, and i will foul which strategy work well in that moment
Forex = uncertainty

Thats the bottom line. The reason why there are good traders is because they understand the concept of money management. I'm under the impression that you have lost some money on the forex which is perfectly normal, happens to the best of us. This system is 90% mechanical. If you are a beginer than you should leave it like this.

So the question is, how do you know when to use what strategy, or if the strategy is just performing well for the time being. It is difficult to know this and i'll be honest I don't know what time of day its best to scalp, or use a 15 min strategy or many other trading strategies for that matter. What I do know is, is that its all about risk to reward. RISK LESS THAN WHAT YOU CAN MAKE AND ONLY USE 2-3% OF YOU ACCOUNT PER TRADE. Now as starter how do you know where to set the profit? or if its a good idea to set a Stop Loss there or somewhere else.

If you're using a repainting indicator or MACD, or RSI or any of those magical indicators we all found when we started the Forex, it is hard to find where to set the targets. The lines don't tell you where to set anything.

With this system there is a simple box. You place the orders, the SL and TP and go to sleep. Your account will not blow over night because you risk less than you can make.

To break even with the 2x TP, you would need to lose 2 times and win once. 3x TP, lose 3 times and win once to break even. The odds are definitely on our side and thats the best thing to have when you are trading. The Holy Grail of Forex is your High School math class because thats where you learn probability.

Try this if you don't believe me. Chose a position, long or short. Flip a coin, if its heads than you won, tails you lost. Everytime you win add 2 points and everytime you lose subtract 1. Do this 10 times and see were you stand. This is the same concept with the box breakout.

Keep in mind that this strategy also uses logic because we take a position on the break of an important candle of the week. So don't worry we aren't risking our money by flipping coins.

The entry is important. BUT THE EXIT IS MUCH MORE IMPORTANT. This is again the reason why a lot of people fail. Our natural instinct is to ask, "OK, so where do I get in? ". Realize that the exit is more important.
  • #215
  • May 19, 2009 3:44pm May 19, 2009 3:44pm
Quoting AidyMac
Hi Ace284

Thanks for the tip it looks like a good common sense strategy for a newby like myself to implement.

However could I ask is this a strategy that can only be implemented at the start of the week and how do you draw that box?

Like I said am a newby and am soaking up anything and everything like a sponge in the forum.

Kind regards and many thanks.

Aidy Mac
Yes the box is drawn only once at the start of each week. Connect the high and low of the first 4 hour candle after it has formed. Just take a look at the first post and the drawing should be clear.
  • #216
  • May 19, 2009 4:03pm May 19, 2009 4:03pm
Hi Paulus ,


I was just replying to your post #214 . What you said in that post takes years for traders to learn . The fact that you understand that about Risk/Reward means that you've been trading awhile , or you cut the learning by years by learning this sooner than most . Once you understand that trading IS all about probabilities , it makes it easier to pull the trigger on the trade because the probabilities ARE you our favor . You WILL have losing trades , but because your winners are twice as large as the losers , you will continue to make money over time .

Excellent post !


Best of trades ,

EZTrades
" Master Your Set-Up , Master Yourself "
  • #217
  • May 19, 2009 4:27pm May 19, 2009 4:27pm
Quoting EZTrades
Hi Paulus ,


I was just replying to your post #214 . What you said in that post takes years for traders to learn . The fact that you understand that about Risk/Reward means that you've been trading awhile , or you cut the learning by years by learning this sooner than most . Once you understand that trading IS all about probabilities , it makes it easier to pull the trigger on the trade because the probabilities ARE you our favor . You WILL have losing trades , but because your winners are twice...

I didn't realize that Ace284 looks like Paulus .
But interestingly enough the first forexfactory page I found was Paulus'

I've only been trading the forex for 8 months. So yes I did fast track. I'm not saying this to brag but I'm saying that it is possible if you have the drive for it.
  • #218
  • May 19, 2009 4:30pm May 19, 2009 4:30pm
Hey Ace ,


My apologies ! LOL . But in my defense you both have good trading systems and threads .





EZTrades

P.S - Will pay a little more attention to which thread I'm on in the future !
" Master Your Set-Up , Master Yourself "
  • #219
  • May 19, 2009 4:37pm May 19, 2009 4:37pm
Quoting Ace284
Forex = uncertainty

Thats the bottom line. The reason why there are good traders is because they understand the concept of money management. I'm under the impression that you have lost some money on the forex which is perfectly normal, happens to the best of us. This system is 90% mechanical. If you are a beginer than you should leave it like this.

I agree with you but in this strategy is no constant stop and profit. For example one weeks i have 2 losses 170p and 170p next week : +100p (profit) and 50p losses and so on . and what we shoud do with 10p+spread ? How to better target stop and profit with 1box - stop and 2box+10p+spread or 1box stop and 2box ???
  • #220
  • Edited 5:26pm May 19, 2009 4:41pm | Edited 5:26pm
Quoting Ronald Raygun
This is one reason why I use so many different trading systems. Markets can change, but no one change can completely wipe out my trading. When it comes to determining whether or not a trading system works anymore, you first need to figure out what edge the system has. For example,

[list][*]BigDog Strategy: Breakout of the hours before and after the New York open.[*]4H Box: Direction of the week can be determined by the first 4H bar.[*]Most Commercial EAs: Euro-Pairs move in a predictable range during the asian session, so when the price reaches...
Thanks for the fact sheet idea. I've been studying a number of AEs and systems. It appears that any given system only works for a time under specific market conditions. It works great for a bit ... then kinda becomes obsolete.

My focus is being able to identify clearly determine where the market is, then identify which systems/AEs work under those conditions. I've only got about 6 months under my belt, but it's coming along.

Also, thanks for a breakdown above.

Oh, and something additional I've learned: Systems work very differently on varying currency pairs. As much as possible, get to know your currency pairs. For instance, how do they behave at the end and beginning of the major sessions?

Fx_Discipulo
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